News Feature | November 6, 2013

Grocery and Convenience Store IT News for VARs — November 6, 2013

This week, representatives of the supermarket industry fight back against patent trolls, c-store industry grows in spite of trying economy, and survey shows how technology can create satisfying experience for grocery shoppers.

Supermarkets Take Aim At Patent Trolls

Timothy Lee for the Washington Post says that representatives of the supermarket industry supported a letter asking Congress to make it easier to invalidate low-quality patents. While “patent trolling” has generally affected larger technology companies, frivolous lawsuits have begun to plague other sectors of the economy, including casinos, restaurants, airlines, and grocers. The letter is also asking for expansion of the “covered business method” (CBM), which would expedite the process of challenging patents at the U.S. Patent and Trademark Office. In the grocery industry alone, patent threats have been issued for the use of common technologies like QR codes or website store locators. Because of the grocery industry’s low profit margin, the high costs and slow pace of patent litigation begins to affect customers, making the CBM’s expedited process especially appealing.

Convenience Store Industry Maintains Growth

According to the U.S. Industry Market Research Report released by IBISWorld, the convenience store vertical has maintained its growth regardless of rising costs in a difficult economy. The report reveals that the c-store industry revenue has grown 1.9 percent annually to $40.1 billion in 2013. According to IBISWorld industry analyst, Hester Jeon, the industry has faced increasing credit card/interchange fees, longer store hours, and higher employee wages. However, regardless of these financial challenges, the industry’s profit margins have increased and account for 1.4 percent of revenue in 2013 because of consolidation and sales of higher-margin goods. Industry revenue is expected to increase 2.8 percent in 2013 with the aid of smokeless tobacco sales and greater focus on food service, snacks, and fresh food. Larger companies’ market share is expected to increase over the next five years as larger companies continue to acquire smaller ones.

Grocery Shoppers Just Want To Have Fun

Progressive Grocer discusses the key findings of the Retail Feedback Group study entitled “2013 US Supermarket Experience Study.” The study reveals that 89 percent of shoppers express trip satisfaction, rating their experiences across all outlets a 4.45 out of 5.0, with 5.0 being totally satisfied. However, only 2 out of 10 customers claimed their primary store “absolutely” provides and exciting and fun environment. In terms of technology, customers claim they are most likely to use digital coupons, apps for weekly sales items, and grocery list apps in the next year. Mobile payment was the least likely to be used with only 17 percent anticipating using this service. Similarly, the study uncovered a 50 percent opportunity gap between consumer’s social media usage (74 percent) and connectivity (24 percent) to their primary supermarket. Consumers are most likely to try a new meal or restaurant, purchase a new food item, or shop at a different store based on recommendations from a social network. The study’s infographic can be found here.

Grocery and Convenience Store IT Talking Points

A recent NPD Group study reveals that Hispanics are more likely to use convenience stores for grocery foods, dairy, and bread purchases. Convenience Store Decisions provides a list of suggestions to market to this important demographic. One suggestion is for operators to be thorough in getting to know regular customers and ask questions about what Hispanic customers might be looking for. Hiring employees who can speak Spanish and providing store signage in Spanish will also help establish a hospitable environment and build trust.

UK research firm IGD ShopperVista recently released results from a survey on the role Internet and technology play in the grocery shopping process. While only 6 percent surveyed in 2010 claimed they used the Internet to research grocers and the best deals, this total has increased to 30 percent. The survey reported that 41 percent of 18-24 year olds and 48 percent of shoppers with children under the age of five are the savviest “online cherry pickers.” Price comparison sites, recipe/meal idea sites, and mobile alerts about store deals were highlighted as some of the most prevalent or influential UK shopping technologies. IGD says that, because of the recession, technology has been an important tool to help consumers research the best deals before shopping and save money.